In the 1917 case of Korbly, Receiver of The Pynchon National Bank v. Springfield Institution for Savings et al., the U.S Supreme Court was tasked with determining whether a national bank could be held liable for funds deposited by an insolvent savings institution. The Springfield Institution had made deposits to the Pynchon National Bank before it went bankrupt and its receiver sought to recover those funds from Pynchon's receiver after it too became insolvent. The court ruled in favor of Korbly, stating that as long as there was no knowledge or suspicion on part of the receiving bank about insolvency at time of deposit, they were not obligated to return any money received in good faith. This ruling clarified that banks are not expected to investigate every depositor’s financial status and can operate under presumption that all transactions are legal unless proven otherwise.

The dissenting opinion in the case of Korbly, Receiver of The Pynchon National Bank v. Springfield Institution for Savings et al., 1917, argued that the majority's decision was inconsistent with previous rulings and principles established by the Supreme Court. It contended that a national bank should not be treated differently from other creditors when it comes to preference in bankruptcy proceedings. The dissent pointed out that under federal law, all creditors are supposed to be treated equally unless there is a valid lien or security interest favoring one over others. In this case, no such lien or security interest existed; therefore, according to the dissenters' view, treating the national bank differently violated fundamental principles of fairness and equality among creditors as well as contradicting existing legal precedents.